I think that this is the core of it. Virtual worlds were always going to struggle because the abstract space that is the internet, where people cluster around

I think that this is the core of it. Virtual worlds were always going to struggle because the abstract space that is the internet, where people cluster around concepts and you're never more than one step from anyone else who is connected is just much, much less limiting than dimensional space. There is only one thing that dimensional space is good for, and that is for serendipity. When you can talk to anyone, you talk only to those you already know you want to talk to. When you're located in a point in space, you talk and interact with others that happen to be near that point in space. This is why the few areas that virtual reality does seem to be useful is for meeting new people, or for activities where limiting yourself is the whole point -i.e. games.